Senior citizens and their medicines
Senior citizens and their medicines
Updated 01:23am (Mla time) Nov 26, 2004
By Michael Tan
Inquirer News Service
Editor's Note: Published on page A15 of the November 26, 2004 issue of the Philippine Daily Inquirer
THERE are more than three million Filipinos aged 65 and above, many suffering from chronic diseases (hypertension, diabetes, arthritis and rheumatism) for which they need to take daily medication.
At the family reunions I attend, I constantly hear the elderly complaining about how they spend several thousand pesos a month for their medicines. For the poor, it is even worse, with even the lower-priced drugs posing a heavy burden.
Take the case of a senior citizen receiving P1,800 a month from her social security check, translating into a daily budget of P60. If she's put on one of the cheaper beta-blockers to control her hypertension (high blood pressure), she will still need P30 a day just to get that medicine. That's half of her daily budget.
No win
Some relief has been available through a mandatory 20-percent discount on senior citizen's medicines but that benefit may now disappear. The Drugstore Association of the Philippines (DSAP) and several senior citizens' organizations are now in a gridlock over the discounts after Health Secretary Manuel Dayrit issued an administrative order reducing the discount from 20 percent to 3 percent on prescribed branded medicines. The earlier 20-percent discount would have remained for generic medicines.
Dayrit was responding to complaints from drugstore owners that they had on average only a 15-percent profit margin on their products and that they were losing money with the 20-percent discounts given to senior citizens.
There was an outcry from the senior citizens' groups protesting Dayrit's order. The DSAP proposed a compromise, extending the 3-percent discounts to supplements or natural medicinal products, which were not previously eligible for senior citizens' discounts. The senior citizens were not to be placated, insisting on a 20-percent discount for all drugs.
We now have a no-win situation but it isn't just the drugstore owners and senior citizens who lose. What we see here is another chapter in the never-ending saga of a nation held captive by the drug industry, with government unable to offer anything except stopgap measures such as the senior citizens' discounts.
I've been working on pharmaceutical issues for many years, but the full impact of this desperate situation hit me only last Wednesday as I listened to lawyer Susan Pearl Villanueva as she explained legal issues around drug prices during an Akbayan national conference on health issues.
Lack of competition
Villanueva is a top-rate lawyer, a bar topnotcher and a specialist on intellectual property rights, which she handles as a private lawyer. Her analysis of our quagmire boils down to this: Drug companies can get away with their high prices because there is a lack of competition, a situation brought about by our government's, I will be polite here, timidity.
Much has been said about how drug companies dictate their prices because of their abuse of the patent system. The drug companies can dictate prices partly because of a patent system that allows them exclusive rights to produce and distribute a medicine. This used to be 17 years but has been extended to 20 years, courtesy of the World Trade Organization (WTO) expanded system.
But Villanueva emphasizes that the WTO itself agreed at a meeting in Doha on a number of "flexibilities" allowing governments to get around the patent requirements for public health reasons. For example, governments can invoke compulsory licensing, requiring a drug company to license other firms to produce their drugs at lower cost. Villanueva pointed out that we have a law that allows compulsory licensing but this is rarely used because it takes so long for our Bureau of Patents to approve an application, with the drug companies further delaying the process by challenging these requests.
Many drugs remain expensive even after they go off patent because we remain dependent on a few large multinationals for our medicines. One measure is parallel importation, which our Department of Trade and Industry (DTI) has attempted. Here, the DTI imports the same branded preparations as those sold by multinationals in the Philippines, but from other subsidiaries of the multinationals that charge lower prices, usually the ones in India. I can see why, for example, the anti-hypertension medicine Inderal (propranolol) costs P11 here but the same branded preparation costs only about P3 in Delhi.
Corporate terrorism
The multinationals responded by suing the DTI, including officials in their personal capacity, claiming exclusive rights to sell the medicines locally. Again, the sad fact is that there are international agreements that could be enacted into local laws to protect our DTI officials from corporate terrorism but this has not been done.
Villanueva discussed other alternatives to reduce drug prices. The government could provide more support to local companies producing low-cost but quality generics. Or it could go into centralized procurement of essential medicines, and provide these to the public. The government is in a position to negotiate for better prices if it would pool all its drug requirements together, whether for the Department of Health’s hospitals or its other agencies (for example, the Department of Education and the Department of National Defense).
Finally, our government needs to strengthen its anti-trust laws to prevent monopolies. Unfortunately, our government does not intervene, claiming we respect free enterprise.
Our health care system apes that of the United States, which over-emphasizes protection of businesses. It is not surprising that health care is now so expensive in the United States, and that includes medicines, with few safety nets to help the poor or senior citizens.
American senior citizens are at least an organized lot, with powerful lobbying groups. They've also looked for other sources of medicines, including buying them from Canada, where government intervention has brought down the costs of the drugs.
Our senior citizens have much less power, so the government needs to do more to protect their interests. We need to look into the issues mentioned by Villanueva, including her advice for government to have a unified plan and to speak with one voice. For example, you can't have the trade department doing parallel imports while the courts are used by multinationals to bully conscientious government officials with lawsuits. Similarly, you can't ask drugstores to give a 20-percent discount on drugs while allowing the drug companies to charge such high drug prices to the retailers, with only a 15-percent margin of profit.
Updated 01:23am (Mla time) Nov 26, 2004
By Michael Tan
Inquirer News Service
Editor's Note: Published on page A15 of the November 26, 2004 issue of the Philippine Daily Inquirer
THERE are more than three million Filipinos aged 65 and above, many suffering from chronic diseases (hypertension, diabetes, arthritis and rheumatism) for which they need to take daily medication.
At the family reunions I attend, I constantly hear the elderly complaining about how they spend several thousand pesos a month for their medicines. For the poor, it is even worse, with even the lower-priced drugs posing a heavy burden.
Take the case of a senior citizen receiving P1,800 a month from her social security check, translating into a daily budget of P60. If she's put on one of the cheaper beta-blockers to control her hypertension (high blood pressure), she will still need P30 a day just to get that medicine. That's half of her daily budget.
No win
Some relief has been available through a mandatory 20-percent discount on senior citizen's medicines but that benefit may now disappear. The Drugstore Association of the Philippines (DSAP) and several senior citizens' organizations are now in a gridlock over the discounts after Health Secretary Manuel Dayrit issued an administrative order reducing the discount from 20 percent to 3 percent on prescribed branded medicines. The earlier 20-percent discount would have remained for generic medicines.
Dayrit was responding to complaints from drugstore owners that they had on average only a 15-percent profit margin on their products and that they were losing money with the 20-percent discounts given to senior citizens.
There was an outcry from the senior citizens' groups protesting Dayrit's order. The DSAP proposed a compromise, extending the 3-percent discounts to supplements or natural medicinal products, which were not previously eligible for senior citizens' discounts. The senior citizens were not to be placated, insisting on a 20-percent discount for all drugs.
We now have a no-win situation but it isn't just the drugstore owners and senior citizens who lose. What we see here is another chapter in the never-ending saga of a nation held captive by the drug industry, with government unable to offer anything except stopgap measures such as the senior citizens' discounts.
I've been working on pharmaceutical issues for many years, but the full impact of this desperate situation hit me only last Wednesday as I listened to lawyer Susan Pearl Villanueva as she explained legal issues around drug prices during an Akbayan national conference on health issues.
Lack of competition
Villanueva is a top-rate lawyer, a bar topnotcher and a specialist on intellectual property rights, which she handles as a private lawyer. Her analysis of our quagmire boils down to this: Drug companies can get away with their high prices because there is a lack of competition, a situation brought about by our government's, I will be polite here, timidity.
Much has been said about how drug companies dictate their prices because of their abuse of the patent system. The drug companies can dictate prices partly because of a patent system that allows them exclusive rights to produce and distribute a medicine. This used to be 17 years but has been extended to 20 years, courtesy of the World Trade Organization (WTO) expanded system.
But Villanueva emphasizes that the WTO itself agreed at a meeting in Doha on a number of "flexibilities" allowing governments to get around the patent requirements for public health reasons. For example, governments can invoke compulsory licensing, requiring a drug company to license other firms to produce their drugs at lower cost. Villanueva pointed out that we have a law that allows compulsory licensing but this is rarely used because it takes so long for our Bureau of Patents to approve an application, with the drug companies further delaying the process by challenging these requests.
Many drugs remain expensive even after they go off patent because we remain dependent on a few large multinationals for our medicines. One measure is parallel importation, which our Department of Trade and Industry (DTI) has attempted. Here, the DTI imports the same branded preparations as those sold by multinationals in the Philippines, but from other subsidiaries of the multinationals that charge lower prices, usually the ones in India. I can see why, for example, the anti-hypertension medicine Inderal (propranolol) costs P11 here but the same branded preparation costs only about P3 in Delhi.
Corporate terrorism
The multinationals responded by suing the DTI, including officials in their personal capacity, claiming exclusive rights to sell the medicines locally. Again, the sad fact is that there are international agreements that could be enacted into local laws to protect our DTI officials from corporate terrorism but this has not been done.
Villanueva discussed other alternatives to reduce drug prices. The government could provide more support to local companies producing low-cost but quality generics. Or it could go into centralized procurement of essential medicines, and provide these to the public. The government is in a position to negotiate for better prices if it would pool all its drug requirements together, whether for the Department of Health’s hospitals or its other agencies (for example, the Department of Education and the Department of National Defense).
Finally, our government needs to strengthen its anti-trust laws to prevent monopolies. Unfortunately, our government does not intervene, claiming we respect free enterprise.
Our health care system apes that of the United States, which over-emphasizes protection of businesses. It is not surprising that health care is now so expensive in the United States, and that includes medicines, with few safety nets to help the poor or senior citizens.
American senior citizens are at least an organized lot, with powerful lobbying groups. They've also looked for other sources of medicines, including buying them from Canada, where government intervention has brought down the costs of the drugs.
Our senior citizens have much less power, so the government needs to do more to protect their interests. We need to look into the issues mentioned by Villanueva, including her advice for government to have a unified plan and to speak with one voice. For example, you can't have the trade department doing parallel imports while the courts are used by multinationals to bully conscientious government officials with lawsuits. Similarly, you can't ask drugstores to give a 20-percent discount on drugs while allowing the drug companies to charge such high drug prices to the retailers, with only a 15-percent margin of profit.
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